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Industries Most and Least Impacted by COVID-19 from a Probability of Default Perspective - January 2022 Update

This article is written and published by S&P Global Market Intelligence, a division independent from S&P Global Ratings. Lowercase nomenclature is used to differentiate S&P Global Market Intelligence credit scores from the credit ratings issued by S&P Global Ratings.

In our five-part blog series over 2020 and 2021, we assessed the impact of COVID-19 on the credit risk of industries from a probability of default (PD) perspective, focusing on sectors that experienced the most and least disruption. You can read each blog here: dated March 2020, April 2020, September 2020, March 2021, and October 2021.

Given the continued impact of COVID- 19 on global economies, we are now extending the series into 2022 to provide a perspective on recovery trends and to highlight which sectors and countries across the globe are showing the highest and lowest levels of credit risk disruption. We have leveraged our Credit Analytics PD Model Market Signals (PDMS) that uses stock price movements and asset volatility as inputs to calculate a one-year PD for public companies globally.

Most Impacted Industries

The five industries most affected by COVID-19 over the period January 2, 2020, to January 15, 2022, included: Airlines; Automobiles; Energy Equipment & Services; Hotels, Restaurants & Leisure; and, Specialty Retail. Auto Components and Multiline Retail fell off the list since our last analysis, given the increased timeline into the early part of this year. As shown in Figure 1, the median PDMS for each of the five industries peaked in April 2020 but had declined substantially by January 2021. The median PD for both Airlines and Automobiles fluctuated more than the PD for the other three industries throughout 2021 but remained at a similar level throughout 2021 and above the January 2, 2020 baseline. Of this group, Airlines experienced the highest increase in PD over the period in question, increasing from a median PD of 1.75% at the start of 2020 to 4.79% today – a change of 174%.

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Figure 1: Most Impacted Industries

Industry Deep-dive:

Airlines: Our analysis shows that the median PD for Airlines peaked at 26.92% (an implied credit score of ‘ccc-’) on April 2, 2020,[1] and then started declining around the time the $25 billion bailout was announced by the U.S. government.[2] By the end of August 2020, the median PD stood at 6.36% (‘b-’) before spiking again on September 23, 2020, to 13.56% (‘ccc+’). This second spike was brought on by market participants feeling the downstream impacts of the protracted recovery. In particular, air traffic at that time fell by nearly 40% compared to pre-pandemic levels.[3] Air travel demand is expected to accelerate in 2022, but only return to normal by 2024, as vaccination rates inch up, mobility constraints ease and crucial long-haul routes reopen.[4] Airlines remain susceptible to changing pandemic-related restrictions amid uncertainty regarding the recovery of business and intercontinental air travel, so the way forward presents challenges. The recent surge in COVID-19 cases is blurring the industry's prospects, as are potential setbacks stemming from elevated global energy prices and inflationary trends.

Automobiles: Looking forward, companies will be more cognizant of supply risks and adjust their businesses to adapt to longer lead times and uncertainty. Businesses wary of supply-related shutdowns or stock shortages usually react with additional margins.[5] For manufacturers, retailers, and other goods-focused companies, this usually means placing more orders to increase inventories, which in turn can feed a cycle that perpetuates congestion and inflation. The automotive industry showed one of the largest increases in inventories in the third quarter of 2021, at 37.4% year-over-year. This is likely directly related to the global chip shortage, with companies like General Motors Co. producing and storing work-in-progress vehicles until supplies come in.

Least Impacted Industries

The five industries that have been least impacted by COVID-19 include Communications Equipment; Health Care Equipment & Supplies; Life Science Tools & Services; Pharmaceuticals; and, REITS. In this case, Insurance, Semiconductors & Semiconductor Equipment, and Household Products fell off the list since our last analysis, given the longer timeframe being considered. As shown in Figure 2, the median PD for these industries followed a similar trend as those most impacted, but at lower starting and ending levels.

Figure 2: Least Impacted Industries

Country View

The aftershocks of the COVID-19 pandemic pose significant risks for all countries. Persistent inflation, tied to supply chain disruptions and soaring energy prices, could trigger wage inflation and push major central banks to hike rates sooner and faster.[6] This could generate market volatility, likely amplified by elevated global debt levels. New variants of the virus could weaken the global economic recovery, as could China’s policy and economic developments. Beyond COVID-19, credit markets face significant longer-term uncertainties around energy transition, cyber risk, and evolving financial systems in an increasingly digital economy.

Figure 3: Country View

Recovery Trends

Almost two-thirds (62%) of industries in our universe saw their PD increase and stay elevated over the past two years given uncertainties. The potential for coronavirus variants like omicron to take hold adds another layer of concern about the pandemic and its effects on the economy and credit. Along with that, supply-chain disruptions and slower consumer spending will add unevenness to an unfolding recovery.

Figure 4: A Long Road to Recovery Still Ahead for Many

Notes: 5-day moving average median PD for each respective industry (global data). Classification based on 6-digit Global Industry Classification Standard. Equity Real Estate Investment Trusts, and Real Estate Management & Development are combined at the industry group level. Electric Utilities, Gas Utilities, Multi-Utilities, and Water Utilities are combined at the industry group level.

Source: S&P Global Market Intelligence. As of January 15, 2022. For illustrative purposes only.

As shown in Table 1, some industries were more immune to the devastating impact of the pandemic, even posting declines in their PDs over the past two years. Energy Equipment & Services performed the best, posting a 43% decline over the period.

Table 1: Industries with the Lowest Increase in PD

January 2, 2020 January 15, 2022 PD Change
Energy Equipment & Services 2.80% 1.60% -43%
Tobacco 1.86% 1.14% -39%
Metals & Mining 1.53% 1.21% -21%
Textiles, Apparel & Luxury Goods 1.61% 1.29% -20%
Diversified Financial Services 0.64% 0.57% -11%
Food Products 1.21% 1.11% -8%
Oil, Gas & Consumable Fuels 1.40% 1.36% -3%
Containers & Packaging 1.13% 1.12% -0%
Distributors 1.46% 1.47% +1%
Capital Markets 0.38% 0.38% +2%

Notes: 5-day moving average median PD for each respective industry (global data). Classification based on 6-digit Global Industry Classification Standard. Equity Real Estate Investment Trusts, and Real Estate Management & Development are combined at the industry group level. Electric Utilities, Gas Utilities, Multi-Utilities, and Water Utilities are combined at the industry group level.

Source: S&P Global Market Intelligence. As of January 15, 2022. For illustrative purposes only.

The Road & Rail industry took the biggest hit, even surpassing Airlines in terms of its PD increase since January 2020. Even now, rail passengers are facing cancellations or fewer services as train companies face high levels of staff absences due to COVID.[7]

Table 2: Industries with the Highest Increase in PD

January 2, 2020 January 15, 2022 PD Change
Professional Services 0.34% 0.74% +117%
Food & Staples Retailing 0.73% 1.60% +119%
Leisure Products 0.63% 1.39% +119%
Multiline Retail 0.75% 1.83% +145%
Internet & Direct Marketing Retail 1.56% 3.87% +149%
Diversified Consumer Services 0.69% 1.72% +149%
Interactive Media & Services 0.42% 1.07% +154%
Hotels, Restaurants & Leisure 1.75% 4.48% +155%
Airlines 1.75% 4.79% +174%
Road & Rail 0.38% 1.05% +178%

Notes: 5-day moving average median PD for each respective industry (global data). Classification based on 6-digit Global Industry Classification Standard. Equity Real Estate Investment Trusts, and Real Estate Management & Development are combined at industry group level. Electric Utilities, Gas Utilities, Multi-Utilities and Water Utilities are combined at industry group level.

Source: S&P Global Market Intelligence. As of January 15, 2022. For illustrative purposes only.

Click here if you are interested in learning more about the tools we used in this analysis.


[1]  S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence. Lowercase nomenclature is used to differentiate S&P Global Market Intelligence PD credit model scores from the credit ratings issued by S&P Global Ratings.

[2]  Loans to Air Carriers, Eligible Businesses, and National Security Businesses, Read More

[3]  OECD Policy Responses to Coronavirus (COVID-19): COVID-19 and the Aviation Industry: Impact and Policy Responses.” OECD, 15 Oct. 2020, Read More

[4]  COVID-19 Impact: Key Takeaways From Our Articles”, S&P Global Ratings, January 19, 2022, Read More

[5]  Panjiva 2022 Outlook: At the tipping point”, S&P Global Market Intelligence, January 11, 2022,

[6]  COVID-19 Impact: Key Takeaways From Our Articles”, S&P Global Ratings, January 19, 2022, Read More

[7]  Train services hit by COVID staff absences”, Yahoo News, January 5, 2022

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